The opinion of the court was delivered by: Farrell, Associate Judge, Retired:
On Report and Recommendation of the District of Columbia Board on Professional Responsibility (BDN 251-01)
Before RUIZ and THOMPSON, Associate Judges, and FARRELL, Associate Judge, Retired.*fn1
This original disciplinary matter is before us on the recommendation of the Board on Professional Responsibility to disbar respondent (hereafter Mitrano) and require restitution as a condition of reinstatement. The recommendation is based on findings of fact by a Hearing Committee, "adopted . . . with minor revisions" by the Board, and the conclusions of both the Hearing Committee and the Board that Mitrano engaged in misconduct consisting of the following violations of the District of Columbia Rules of Professional Conduct: 8.4 (b) (commission of "criminal act," here theft); 8.4 (c) (dishonesty); 1.15 (a) (misappropriation); 1.15 (b) (failure to notify client of receipt of funds); 1.15 (c) (failure to segregate funds); 1.17 (a) (failure to deposit funds in separate account); and 1.4 (a) (failure to inform client). Underlying all of the violations is the Board's determination that Mitrano took and spent for his own purposes the entirety of a January 8, 1998 check for $241,336.59 issued by the District of Columbia government to his client, Dano Resource Recovery, Inc. (Dano), knowing that the funds - or at least the major part of the funds - did not belong to him.
Like the Board, this court must accept subsidiary findings of fact by the Hearing Committee that are supported by substantial evidence in the record viewed as a whole. See D.C. Bar Rule XI, § 9 (g); In re Micheel, 610 A.2d 231, 234 (D.C. 1992). At the same time, the Board and the court review de novo the Hearing Committee's determination of "'ultimate facts'[,] which are really conclusions of law." Id. (citation omitted); see also In re Appler, 669 A.2d 731, 738 (D.C. 1995). Here, we agree with the Board that the Hearing Committee's findings of fact have substantial, even strong, support in the record as a whole. Moreover, we agree with the Board's legal conclusions and accept its recommendation of disbarrment as required by our decisions. See, e.g., In re Addams, 579 A.2d 190, 191 (D.C. 1990) (en banc). We adopt as our own the Board's Report, appended hereto, and supplement it only with the following brief analysis.
Before the Board and the court, Mitrano's ultimate position has been that he honestly believed he was entitled to treat the $241,336.59 as his own because Michael J. Byorick, an officer of Dano, had endorsed the check over to him as legal fees for his representation of Dano in litigation with the District of Columbia.*fn2 Thus, as to the most serious violation found (Rule 8.4 (b): the "criminal act" of theft), Mitrano's defense is essentially that he had a "claim of right" to the funds. See CRIMINAL JURY INSTRUCTIONS FOR THE DISTRICT OF COLUMBIA, No. 5.03 (2007 ed.); Simmons v. United States, 554 A.2d 1167, 1169 (D.C. 1989). If Mitrano held a "good faith belief," Instr. No. 5.03, that he was entitled to the proceeds of the check, then he could not be found to have committed the crime of theft. See, e.g., Richardson v. United States, 131 U.S. App. D.C. 168, 170, 403 F.2d 574, 576 (1968) ("If the jury finds that the defendant believed himself entitled to the money, it cannot properly find that he had the requisite specific intent for [the larceny-based crime].")
That issue initially troubled us because of language in the Board's Report suggesting that its conclusion that Mitrano "stole the vast majority of the proceeds of the Dano check" (hence violated Rule 8.4 (b)) may have rested in turn on a finding that it was "unreasonable for [him] to rely on the . . . endorsement by Mr. Byorick" (emphasis added) - when an unreasonable, but honestly held, belief would preclude the finding of theft. See id. (citing Morissette v. United States, 342 U.S. 246 (1952), for the principle that "[a]n unfounded but genuine belief that the property taken had been abandoned negatives specific intent"). Reading the Board's Report as a whole, however, we are convinced that its - and the Hearing Committee's - finding of theft rested on the determination that Mitrano did not in fact believe he was entitled to all, or even the majority, of the proceeds of the check. The Committee's Report is replete with findings, for example, that Mitrano "knew that the amount of the check greatly exceeded the fees to which [his] retainer agreement [with Dano] entitled him and knew . . . that others had an interest in the proceeds of the check" (emphasis added). The Board's conclusion that he "wrongfully took from others . . . all the proceeds of the Dano check . . . intend[ing] to deprive [them] of their right to that property and appropriated that property," is an unequivocal determination that he did not believe in good faith - genuinely or honestly - that he was entitled to all of the funds.*fn3
Mitrano challenges the Board's repeated references to "others [besides Dano who] had an interest in the proceeds," including Williams Industries, which had loaned Dano funds during the litigation to continue its operations, and Frank Williams, Jr., President of both Dano and Williams Industries. Mitrano argues that he could not have wrongly taken - either by theft or misappropriation - funds of these "others" without clear and convincing evidence that they owned the check proceeds or had a "just claim" to them. See In re Bailey, 883 A.2d 106, 116-17 (D.C. 2005) (distinguishing claims of a client from "third party claims"). But, regardless of the claim that others such as Williams Industries had to the money - whether by de facto ownership of Dano or "creditor" status that remained unproven - the record amply confirms that Dano itself owned the proceeds.*fn4
Although functionally insolvent at the time the check was issued, Dano still existed as a legal entity, with Frank Williams, Jr. as its president. Thus, the Board correctly states, "at the time [Mitrano] deposited the check," Dano "had a sufficient interest in the proceeds of the check to preclude [his] unilateral action to cash the check and retain the proceeds."
We deal, lastly, with Mitrano's claim that Bar Counsel leveled an unsupported charge of forgery against him, which (besides unfairly stigmatizing him) had the effect of misleading him in the preparation of his defense to the charges ultimately proven. Bar Counsel's Specification of Charges did not use the word forgery, and identified the criminal act being charged under Rule 8.4 (b) as "theft." Nevertheless, paragraph 14 asserted that Mitrano had "endorsed the check" from the District in the name of "Michael J. Byorick, Pres," the implication being that he had done so falsely. On the basis of expert handwriting analysis that Mitrano adduced at the hearing, the Hearing Committee and the Board found that there was not "clear and convincing evidence . . . that [Mitrano] forged Mr. Byorick's name on the check."
For the reasons discussed by the Board, Mitrano's claim that the single-sentence assertion in the Specification that he had personally endorsed the check in another's name caused him to overlook - or under-prepare to meet - the other serious charges including theft and intentional misappropriation is utterly without merit. At the same time, we agree with the Hearing Committee that particular "care [should be] exercised before the very serious charge of forgery [is] leveled against a member of the Bar," and that Bar Counsel would have been better-advised to investigate the signature issue further - perhaps through expert handwriting analysis of its own*fn5 - before asserting that Mitrano had falsified Byorick's endorsement on the check. But this does not relieve Mitrano of the consequences of his own actions.
Accordingly, respondent Peter Paul Mitrano is hereby ordered disbarred. As further recommended by the Board, reinstatement shall be conditioned on proof that he has made restitution to Dano Industries of the proceeds of the January 8, 1998 check, with interest from that date, less any amounts he can prove he was entitled to as of the date he received the check.
DISTRICT OF COLUMBIA COURT OF APPEALS BOARD ON PROFESSIONAL RESPONSIBILITY
In the Matter of: PETER PAUL MITRANO,: Respondent.
A Member of the Bar of the District of Columbia Court of Appeals (Bar Registration No. 410441)
REPORT AND RECOMMENDATION OF THE BOARD ON PROFESSIONAL RESPONSIBILITY
Respondent is charged, inter alia, with theft and misappropriation of a substantial check drawn to his client as the result of protracted litigation Respondent handled against the District of Columbia over a large business contract. Throughout the proceedings before Hearing Committee (the "Committee") Nine and the Board on Professional Responsibility (the "Board"), Respondent has asserted various procedural and substantive errors. After a three-day evidentiary hearing, and the submission of briefs, the Committee rejected Respondent's procedural arguments and found that Bar Counsel had proven by clear and convincing evidence, violations of seven disciplinary rules (including "theft," "dishonesty," and "misappropriation"). It has recommended disbarrment. The Board agrees with the Committee's recommendations in toto. Additionally, we recommend full restitution by Respondent as a precondition to any future reinstatement.
Bar Counsel commenced its investigation of Respondent by a July 6, 2001 letter to him which enclosed a June 6, 2001 written complaint about his handling of proceeds due his client -- Dano Resource Recovery, Inc. -- as the result of litigation with the District of Columbia. Due in great part to positions taken by Respondent on service of process and other investigatory papers, and the need for Bar Counsel to proceed in distant forums to obtain Respondent's bank records relevant to the investigation, the Specification of Charges herein was not filed until July 27, 2005. On November 1, 2005 and again on March 1, 2006, Respondent challenged whether he had been effectively served, although he acknowledged receiving the Specification of Charges*fn6 and filed his Answer to those Charges on March 3, 2006. On March 2, 2006, Respondent also filed additional motions, including (1) a complaint against Bar Counsel for making allegedly false allegations that he had "forged" an endorsement on the check at issue, and (2) a motion to dismiss for Lack of Proper Service.
Respondent filed further motions on April 13, 2006 for proposed discovery of two of the prospective witnesses against him. These motions were denied by the committee Chair for failure to meet the standards of Board Rule 3.2 ("compelling need" and lack of "undue burden").*fn7 A prehearing conference attended by Assistant Bar Counsel and Respondent (pro se) was conducted by the Committee Chair on April 19, 2006. The evidentiary hearing took place on June 5, 6 and 8, 2006. Bar Counsel called five witnesses in its case in brief, including Frank E. Williams, Jr., the President of Dano (Respondent's corporate client) and Phillip C. Jones -- Respondent's co-counsel during the protracted litigation before the Contract Appeals Board and District of Columbia Court of Appeals (the "Court"). Over Respondent's blanket objection, virtually all of Bar Counsel's exhibits were admitted. Respondent, appearing pro se, did not testify on his own behalf, and called one witness -- a forensic document consultant. Respondent's exhibits were virtually all admitted, including those submitted within seven days of the hearing.*fn8 The Committee tentatively concluded that there had been violations of a number of rules*fn9 ("theft", "dishonesty", and misappropriation" among others), a lack of proof on two rules ("failure to keep client reasonably informed" and "unreasonable fee"), and no tentative decision on one rule ("failure to maintain complete records"). Tr. III at 181-83.*fn10 No evidence in aggravation or mitigation was offered. Tr. III at 182-83.
Bar Counsel submitted proposed findings of fact and conclusions of law on August 11, 2006, Respondent filed similar papers on September 5, 2006 and Bar Counsel filed a reply September 14, 2006. The Committee completed and filed its Report and Recommendation on February 9, 2007 to which Respondent filed exceptions and, on March 15, 2007 Respondent's Brief was filed with the Board. Bar Counsel filed its Brief in support of the Hearing Committee Report on April 26, 2007 and Respondent filed his Reply on May 7, 2007. The matter was argued before the Board May 10, 2007: Assistant Bar Counsel, Traci M. Tait and Respondent (pro se) making the oral presentations.
Respondent takes exception to many of the factual findings of the Committee. Bar Counsel supports the Committee's factual findings and conclusions. Committee findings of fact will be affirmed when supported by "substantial evidence on the record, viewed as a whole." Board Rule 13.7; In re Micheel, 610 A.2d 231, 234 (D.C. 1992) (citation omitted). We, of course, owe no deference to the Committee's determinations of "ultimate facts," such as whether the evidence establishes a violation of the Rules, and other conclusions of law. Micheel, 610 A.2d at 234; In re Appler, 669 A.2d 731, 739 (D.C. 1995).
We find that the Committee's findings of fact are well written and amply supported by the record, and have adopted them with minor revisions. Pursuant to Board Rule 13.7, we have made one or two additional findings to provide context and further support for our conclusions.
1. Respondent is a member of the District of Columbia Bar, having been admitted on May 13, 1987 and assigned Bar number 410441. Bar Exhibit ("BX") A.
2. Dano Resource Recovery, Inc. ("Dano") contracted with the District of Columbia in 1982 to provide sludge and solid waste disposal services at the District's Blue Plains sewage treatment plant. BX 1*fn11 at 5. That contract ultimately led to litigation before the District of Columbia Contract Appeals Board. See BX 1.
3. According to the Appeals Board, on March 3, 1982, the President of Dano, Frank E. Williams, Jr., ("Williams" or "Mr. Williams") executed the contract on behalf of the company. Id. at 5. The opinion further noted that on about May 6, 1982, Dano entered into a Washington D.C. Site Joint Venture Agreement with the Williams Group Limited Partnership, dividing the interests equally between them. Id. at 6. Williams Group Limited Partnership had both a general partner and limited partners.
4. Under the Joint Venture, Dano and the Williams Group Limited Partnership agreed that the Joint Venture would perform the work contemplated by the contract for inter alia, the handling and disposition of sludge, solid waste, and compost. Id. at 6. Pursuant to the Joint Venture Agreement the general supervision and management of the work was placed under the exclusive control of Williams Environmental, the general partner of Williams Group Limited Partnership (Dano's joint venture). Id. at 6.
5. In May 1983, the District terminated the contract pursuant to its default clause, asserting that Dano was in default. BX 1A at 41. In June 1983, Dano filed a notice of appeal challenging the District's termination. BX 1 at 8. In September 1983, Dano filed a complaint with the Contract Appeals Board. Id. Dano was subsequently notified by letter dated May 12, 1986 that the D.C. government sought the reimbursement of reprocurement costs as well as other costs from Dano, a determination Dano also appealed. Id. at 1 n.3. Both appeals were consolidated. Id. at 2.
6. On August 30, 1983 Respondent wrote a letter to Williams Industries wherein he provided confidential legal advice regarding a potential legal claim Dano had against the District of Columbia. BX 4. This letter was labeled "Attorney-Client Work Product." Id. Two days later Respondent and Dano executed a retainer agreement for the prosecution of Dano's claim. BX 3, Tr. I at 92-93, 96-97 (Williams). The Agreement stated that Respondent would provide all legal representation for Dano in connection with the District's termination of its contract with Dano. BX 3. In return for performing these services Respondent was to receive $10,000 per month until $60,000 had been paid, any actual out of pocket expenses, ten percent of the first $13 million that Dano recovered, twelve percent of any sum over $13 million, fifty percent of any amount over $50 million and the $75,000 "presently due and owing" to Respondent for the past reinstatement of the contract. Id. at 1-2.*fn13 The Agreement was signed by Peter P. Mitrano and by Mr. Williams in his capacity as president of Dano. BX 3 at 3; Tr. I at 96-97 (Williams). As part of the Agreement, the Joint Venture guaranteed payment of all sums that are or may be payable to Respondent. BX 3 at 4. Signing on behalf of the Joint Venture was Mr. Williams, as Managing Director of Williams Group Ltd. Partnership and Michael J. Byorick as Dano's Representative. Id. Mr. Williams testified that by that time he had replaced Michael J. Byorick, Dano's former president and that Mr. Byorick had signed the retainer agreement "merely as [a] Dano representative." Tr. I at 98-99 (Williams).
7. After termination of the contract by the District in 1983, Dano was insolvent, "not liquid," and "essentially 'fundless.'" Tr. I at 93-94, 102 (Williams). With the approval of Mr. Williams in his capacity as president of Williams Industries, Williams Industries loaned Dano funds to continue its functioning. Id. at 94-95, 102-03 (Williams).
8. Williams Industries also provided in-kind assistance in the form of legal services by its general counsel, Phillip C. Jones, Esquire, as well as its law clerk, Daniel K. Maller, Esquire,*fn14 who was specifically hired to assist in the Dano litigation. Tr. I at 104-06 (Williams); 319-20, 325 (Maller). Mr. Jones was hired as Williams Industries' general counsel as a salaried employee in January 1986 and remained in that position until March/April 1995. Tr. I at 215-16 (Jones). Within 18 months of being hired, Mr. Jones obtained Mr. Williams' authority to act as Respondent's co-counsel on the Dano case. Tr. I at 104-06 (Williams), 217-22 (Jones). Based on the volume of work generated by the Dano litigation, Mr. Jones was to be compensated on a contingency basis in the event of a recovery in connection with the case. Tr. I at 218-19, 225 (Jones), 346 (Maller). Respondent was aware of this arrangement. Id. at 225-26 (Jones), 346 (Maller). Respondent and Mr. Jones, are both listed by the Appeals Board as appearing for Appellant Dano: "For the Appellant: Peter Paul Mitrano, Esq., and Phillip C. Jones, Esq." BX 1 at 1.
9. The hearing before the Appeals Board lasted 84 days. BX 1 at 2 n.4; Tr. I at 223. Respondent's client was Dano; Bar Counsel stipulated that Respondent "never represented Williams Industries." Tr. I at 169; see also, Id. at 172-73.
10. By this time, Dano was totally dependent financially on Williams Industries. Id. at 102-03 (Williams), 330-31 (Maller). During the litigation, Respondent received litigation costs and payment for his services through Mr. Williams, who obtained authorization from Williams Industries. Tr. I at 93-95 (Williams), 295-96 (Jones), 331 (Maller).
11. Because of its insolvency, Dano had no independent location or office. Respondent worked on the case from his home. Id. at 225 (Jones), 324, 358 (Maller). Dano had ceased to have Board meetings by the time Mr. Maller was hired in 1988. Id. at 357 (Maller). Consequently, from the inception of his representation of Dano in 1983, Respondent reported to Williams Industries, and specifically to Mr. Williams, who served as President of both Dano and Williams Industries. Id. at 99, 102, 104-05 (Williams), 232 (Jones), 332 (Maller). Mr. Williams authorized funding Dano and paying Respondent $60,000 in initial attorney's fees. Tr.1 at 93-95 (Williams). Respondent also reported to other corporate officers at Williams Industries and provided confidential written legal advice regarding the Dano litigation to Arthur V. Conover, III, who was then serving as Secretary-Treasurer and Chief Financial Officer for Williams Industries. BX 4; Tr. I at 107-09 (Williams), 332-33 (Maller).
12. Based on the District's position that Dano had defaulted on the contract between them, it had withheld payments from Dano in the amount of $476,242. BX 1 at 9; see Tr. I at 111, 205 (Williams). By order dated December 7, 1990, the Appeals Board decided Dano's appeal, finding that the District was entitled to receive $323,767 in damages from Dano for the cost of removal and disposal of Dano's compost material. BX 1 at 9. The Appeals Board calculated the difference between the amount withheld from Dano ($476,242) and the amount that Dano was liable for in damages ($323,767), and concluded that $152,475 was due and owing to Dano. Id. The Appeals Board also awarded Dano the difference at 4% interest per year from June 6, 1983 the date Dano had filed its notice of appeal. Id.
13. Further litigation and appeals ensued. Tr. I at 100, 105-06, 111 (Williams), 220, 230, 234, 236-37, 301 (Jones), 335 (Maller). The decision of the Appeals Board was affirmed by the District of Columbia Court of Appeals on February 23, 1993. BX 2 at 1. Along with one other attorney retained especially for the appeal, both Respondent and Mr. Jones are listed as representing petitioner Dano Resource Recovery, Inc. Id. at 3; Tr. I at 230-31.
14. Dano did not prevail on any aspect of the litigation. BX 1 at 10; BX 2 at 1, 17. It was entitled to money from the District only because the latter had withheld money otherwise owed to Dano. Tr. I at 110-11 (Williams).*fn15
15. Williams Industries relied on Respondent to follow up with the District of Columbia government in order to obtain, on Dano's behalf, the refund check due the company. BX 9; Tr. I at 339 (Maller). From time to time representatives on behalf of Williams Industries made inquiries of Respondent about the proceeds due Dano. BX 9 at 2. Both Messrs. Jones and Maller inquired of Respondent regarding the status of the judgment, including the whereabouts of the proceeds. Tr. I at 241-44, 290-91 (Jones), 339-43 (Maller). Respondent often gave vague answers, then eventually failed to respond to their inquiries at all. Id. at 241-44, 290-91 (Jones), 340-343 (Maller). Respondent admits he failed to inform either Mr. Jones or Mr. Maller that 16 the check had been received. Respondent's Proposed Findings at 33.*fn16
16. On December 16, 1997, Respondent wrote Michael Byorick of Dano at an address in Spring Hill, Florida, addressing him as Executive Vice President. Respondent stated that he had been advised that "the District of Columbia will soon issue a check to Dano Resource Recovery, Inc. for the sum of $152,475.00 plus interest . . . . " BX 14C at 23. In this letter, Respondent sought to confirm that pursuant to his written fee agreement dated September 1983 "my fee for legal service is ten percent of said $152,475.00 or the sum of $15,247.50." Id. In this letter to Mr. Byorick, Respondent also acknowledged that others had a claim to a portion of the proceeds: "[T]here are expenses previously paid by others that are due to them." Id. The Record in this case contains no response to this letter. Mr. Byorick was deceased at the time of the hearing. Tr. I at 117 (Williams); Tr. II at 605. We do not even know if the letter was ever received.
17. On January 8, 1998, the District issued a check payable to the Order of "Dano Resource Recovery, Inc." in the amount of $241,336.59. BX 5.
18. Respondent caused the check to be deposited on January 14, 1998 in a New Hampshire bank: Account number 9358424917 at Fleet National Bank ("Fleet Bank") (now Bank of America) in the name of Peter Paul Mitrano at 6 Stevens Rd., Hanover, NH 03755. BX 7 at 1, 88-89; Tr. I at 38-39 (Limoli). ...